Cloud computing helps push sales of new servers

Dubai: A boom in greenfield data centre projects and cloud computing in emerging economies has pushed up sales of new computer servers to the EMEA region.

International Data Corporation (IDC) said the "the number of servers shipped was 10.2 per cent year on year after nearly 550,000 were sold."

Third quarter revenues 2010 reached $3.1 billion (Dh11.37 billion), a 6.4 per cent increase over the same quarter last year, said IDC in its latest observations.

It also issued a caveat that despite "shipment volume back to double-digit growth," sales still pale compared to a peak in 2007 fourth quarter when sales reached $5.4 billion.

As sales and shipments of servers climb in the region, the UAE reported a slower return to higher numbers, IDC said.

Beatriz Valle, IDC Senior Research Analyst, told Gulf News that: "Demand in UAE is slowing down according to our figures, down annually in revenue by -1.7 per cent annually and -4.3 per cent quarter on quarter."

Valle said "markets in Saudi Arabia, Turkey and UAE all declined" in server sales while other emerging corners of the region such as South Africa are witnessing double-digit growth in server purchases to meet new demands of the marketplace.

In the Middle East and Africa alone, IDC said that the region was experiencing "3.3 per cent year on year, with the market value rising to $360.5 million."

Valle said that "the driving force behind revenues is server refreshment in Western Europe and greenfield project demand for systems from the emerging markets. And virtualisation deployments in the SMBs (small and medium business) segment are gaining steam. But cloud is also increasingly turning into a driving force in the market."

In Europe, servers are selling well, she said, and are in high demand by telcos "actively engaging in data centre consolidations projects while at the same investing in additional server capacity to support new offerings centred on cloud computing."

New capacity

Valle said "academia, banking, pharmaceutical and oil and gas continue to fuel demand for large x86 server deployments. Banks and to a lesser degree insurance companies are currently all actively engaged in server refreshes and adding new server capacity."

A latest report by IDC says evidence for pent-up demand taking place in fourth quarter 2010 and subsequent quarters "is mounting as IT organisations in banking, government, and telecoms are currently actively looking into upgrading their scale-up server infrastructure."

Nathaniel Martinez, research director in the Enterprise Server Group for IDC EMEA, said that the emerging demand for cloud computing services is resulting in new datacenter projects.

"Cloud is increasingly turning into a driving force on the European server market place. Telcos, service providers, and hosting companies of all sizes and across the land are engaging in data centre consolidation projects and at the same time investing in additional server capacity to support new offerings centered on cloud computing," said Martinez.